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MashieNiblick

MashieNiblick
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  • Halcon Resources: Will The Tuscaloosa Marine Shale Be The Final Nail In The Coffin? [View article]
    I take a far more simple approach to HK. Look at what Floyd Wilson did at Petrohawk. The company was maligned, downgraded and kicked to the curb for a series of failures but kept searching for the next big thing and wound up being very early to the Eagle Ford. That poor, badly managed company sold to BHP Billiton for $15 Billion and its management and shareholders laughed all the way to the bank. HK's story reminds me exactly of Petrohawk's - stumbles here and there, general disrespect for the company and its management, significant declines, then left in the scrap heap...
    Of course, it remains to be seen if HK can "pull a Petrohawk" and finally find a way to be in the right place at the right time. The way new plays are being developed and new technology is making previously forgotten areas into hot ones, there seems to be a lot of opportunity for the HKs of the world that swing for the fences and have the resources to do it more than a few times.
    I like HK at $3.50. It may go lower, of course, but probably not much, and it may go higher, of course, and when it does, probably by a lot. That's a reasonable risk/reward scenario for any stock, but especially one with a management team that's been down this road before.
    Mar 21 01:51 PM | 9 Likes Like |Link to Comment
  • Apple: It's Panic Time [View article]
    On a micro level, where some of the best data is found: my 21 year-old daughter, a former sorority president and center of her social circle, just traded in her Android for an iPhone last week. It was her birthday and we told her she could get any phone she wanted and all she could talk about was finally getting an iPhone: "It's so much cooler than my HTC - it fits in my hand, the apps are ridiculous, and all my friends have them - now I can be in their message group!". She went to Best Buy to get it and they furiously attempted to convince her to buy the new Samsung, "Look at this screen", "Can you believe how big this screen is?", "Have you seen this screen?". My daughter said that it was as if the whole mobile phone section at BB worked for Samsung. She stuck to her guns, got her iPhone, and before the end of the day got a group message for a party that night and had downloaded an Apple app she'd always wanted, plus was able to sync it with her Mac.

    Oh yeah, you know she's a Mac user - like every kid at her college, by the time she was a sophomore she was left out of all the new software, apps and other cool stuff because she was one of the few kids who didn't have a Mac notebook. Needless to say dumped her Dell for a Mac, emptying her bank account for it, and has never looked back. Her 25 year-old brother did the same thing when he was in school - used his own money to trade in the Sony we gave him for graduation and upgraded to the Mac. I don't know about the rest of the world, but on most college campuses and for anyone under 35, you either go Apple or go home.
    Part 2 of my micro-level story: I got one of the first Samsung S3s and it was the worst phone I've ever had. It had lots of bells and whistles and I sure loved that big screen, but I've never had a worse phone for getting and keeping a signal. Standing side-by-side with any other phone user using the same cell service, they'd have four bars and I'd have 2, or they'd have 2 and I'd have no signal. Everyone I called complained I sounded like I was in a tunnel or underwater. After three trips to Best Buy and one complete replacement to no benefit, their "no lemons" warranty policy kicked in and I picked out a new HTC, which I have loved ever since.
    I'm long Apple, having dived in around $560. Hurts right now but I believe in this company and its almost creepy way of insinuating itself into the lives of its users. It's like tech crack, once you're into Apple you'll never get out, and it's viral - from the iPhone to the Mac to iTunes to the iPad.
    The virus may be sleeping for now, but like all real viruses it only takes a fresh outbreak to infect another large portion of the population. In the meantime, it's still in people's blood, and they're still adding to their Apple collection of devices. This is just a brief period of dormancy. As noted in comments above, this has happed 3-4 times in the past whenever Apple was in a brief inter-release lull, and each time it led to much rending of garments and gnashing of teeth. It may not be Apple TV this time but it'll be something. Few saw the iPad coming either.
    Jul 1 01:15 PM | 4 Likes Like |Link to Comment
  • Southern Copper (SCCO) is considering closing its foundry and refinery in southern Peru because it doesn't think it can comply with limits on sulfur dioxide emissions that will take effect next year, an internal document says. It's unclear how such a closure would affect SCCO's annual copper output, estimated at 650K metric tons this year. [View news story]
    I take this as nothing more then SCCO letting the Peruvian government know that harsher regulations will hurt business. It's clear from the press release that they've been arguing this with the regulators for some time now and this is the next logical step in the negotiations. Releasing the information via a memo to the staff is a time-honored way to let the world know what could happen if the regulations aren't loosened or delayed.
    Jul 5 06:00 PM | 2 Likes Like |Link to Comment
  • Going All-In On SandRidge Energy [View article]
    I've weighed in on SD before. I know the company, the assets, the history and the man. I never touched this stock and I never will.
    Jan 8 06:36 PM | 2 Likes Like |Link to Comment
  • Panic-selling in income producers (I, II) infected the BDC's as well, notably Main Street (MAIN) and Triangle (TCAP), both down more than 10%. Fed meddling seemingly can't hurt their returns, but most names in the popular sector trade well above their net asset values (MAIN is 57% above Sept. 30 NAV after today's decline, TCAP 47%), making them vulnerable to a change in sentiment even if business is doing fine. [View news story]
    Nothing but doom and gloom, but not just because Obama won. We all knew that that was reasonably likely, or at least anyone who could read the news with an impartial eye could. All of the last week's value destruction can't be just the result of us finding out that the polls were right, so what is it?

    Consensus is building that it's a combination of three significant factors: 1) Germany's weakening economy threatens all of Europe's solvency, 2) the election confirms that we'll spend the next four years minmizing our chances of economic recovery from this most-anti business administration, and 3) less than thrilling earnings reports. Germany and the earnings take out tech, earnings and the negative tax implications disrupt MLPs and REITs.

    There will be pops when there is consensus on how to raise taxes ("if" was decided November 6th), and particularly if there's any agreement on managing entitlements. Increasing the federal debt limit and pushing back the fiscal cliff will help stabilize people's attitudes, but will it be enough? None of that will make Germany any stronger or improve next quarter's earnings reports, but at least settling one of the three factors should give us a fighting chance.

    Until those things come to pass and the impact on the markets is clear, I agree with tampat - stay away for now, let this baby settle. It could be another 2-3 months of steady declines.
    Nov 14 06:34 PM | 2 Likes Like |Link to Comment
  • Danger Zone: Workday [View article]
    I smell disaster on all these high-tech momentum stocks that are built on concepts and not fundamentals. You don't have to be very old to remember what happened in 2000. Once the market loses its enthusiasm for any sector then basic fundamental financial analysis becomes the only thing that its stock prices are based on. That is a scary thought with these high-concept/no profit darlings.

    I'm out.
    Apr 16 02:20 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners: 9.9% Yield, Good But Expensive [View article]
    Depends on what you consider "long term". As a 35-year employee of the oil patch and a somewhat knowledgeable investor, I spotted MEMP a mile away when NGP announced its plans. I have always had tremendous respect for the management of both companies, and so I jumped on MEMP when it opened almost two years ago. I don't reinvest dividends because I hate the randomness, but I do buy on dips and have built MEMP up to almost 10% of my portfolio. So, for almost two years now I've been raking in the +/- 10% distribution and am up over 20% on stock appreciation. That feels like long-term to me.

    I don't keep a lot of stocks for two years but this one's been special. To be able to make money on gassy assets in this market takes that "laser focus" and they've proved themselves again and again. On top of their ability to make money in this $3.70/MCF world, just imagine the potential if gas ever gets back to the $5-6 that many feel is inevitable.

    There's a lot to like here.
    Sep 21 05:49 PM | 1 Like Like |Link to Comment
  • Evaluating Southern Copper's Intrinsic Value [View article]
    Excellent analysis - I'm a Follower from now on.

    Can anyone explain the highly erratic dividends on SCCO? I haven't been following it long enough to figure this out, but the $2.75 paid in November really distorts my calculations.

    Anybody know what's going on there?
    May 20 12:42 PM | 1 Like Like |Link to Comment
  • QR Energy: Risky But Worth It [View article]
    Actually, G&A means quite a bit more than miscellaneous. From Investopedia: "General and administrative expenses encompass a variety of expenses associated with performing the daily operations in a company. In the company's income statement, these expenses with generally appear under operating expenses. Legal expenses, other professional expenses and executive salaries may also be included."

    And Dr. Jan, with all due respect, G&A is so common in financial circles that it rarely needs explaining. In those cases where I stumble across an acronym that I don't know, I just look it up.
    Dec 13 03:30 PM | 1 Like Like |Link to Comment
  • QR Energy: Risky But Worth It [View article]
    QRE is one of my largest holdings, in a taxable account, initiated at a variety of prices around $20/share. I'm getting killed. And now this, the change in rules that will allow significantly higher G&A: that's a 500% increase, which is pretty huge. Does anyone know why they've done this, what the money is to be used for? Were we all victims of a bait and switch from their original promise to hold G&A to 3.5% of EBITDA?
    Dec 11 07:01 PM | 1 Like Like |Link to Comment
  • The 'Must Own' Stock For A Natural Gas Rebound [View article]
    I would not hold my breath for XOM to purchase CHK or any of CHK's significant assets. Don't forget that XOM bought XTO and its massive gas reserves at the peak of the gas market and has been trying to justify that acquisition ever since. Not to mention that CHK as a corporation has so much hair on it it's been mistaken for Big Foot.
    The backlog of XTO gas drilling and surfeit of gas production is surely one of the reasons why XOM is looking to export LNG. Now, XOM buying Cheniere, that makes more sense, although I wouldn't hold my breath on that either. XOM's standards for site selection and regulatory approval are second to none in the industry, and it's unlikely they would find everything that Cheniere's done to be up to "Exxon standards". No, I think XOM's got plenty of gas and gas potential, and is more than likely to make this move on their own. Of course, I could be completely wrong. Wouldn't be the first time.
    Jun 5 01:50 PM | 1 Like Like |Link to Comment
  • GreenHunter Energy (GRH +4.2%), fresh off announcing an enhanced Eagle Ford presence through the development of seven new salt water disposal wells, says it has expanded its Appalachian equipment assets to service oil and gas operators active in the Marcellus and Utica shale plays.  [View news story]
    Very risky, but very high reward. The business plan is entirely solid, servicing the oil and gas producers, and particularly the drillers in resource plays requiring large amounts of water for fracing. Alternatives are few and the demand is great and with no end in sight.
    GRH has wisely diversified into multiple resource plays, including the Bakken, Eagle Ford, Marcellus/Utica, and even a toe-hold in the Mississipian Lime in Oklahoma. They've wisely extended their service offerings to accomodate whatever kind of water management the customer needs. However, the basic money maker is so simple you just need a calculator: Every well drilled in any one of these plays must recycle or dispose of the water produced once it's put on line. Few producers have the time, expertise or incentive to manage their own water when a qualified alternative is knocking on their door. Check GHR's latest investor presentation - they're getting $7-10 per barrel to haul water in the Marcellus, and another $3/bbl to dispose of it. Holy crap! Even if gas prices force a minimum of gas drilling in those segments of the plays, you've still got $90 oil to support continued oil drilling, and the Marcellus, Utica, Eagle Ford, and Bakken all have substantial undrilled oil and/or wet gas potential.
    This is really simple: if you believe in the future of oil and gas, then you can buy the producers, the services companies, or both. In this case a well-funded, well-conceived, well-run service company with huge upside is trading for less than $2/share and belongs in the $6-8 range. I'll take that risk.
    [I am long GRH and intend to buy more when the impact of summer on natgas prices is known]
    May 25 03:59 PM | 1 Like Like |Link to Comment
  • A bull on mortgage REITs, Dividend Master nevertheless unloads American Capital Agency (AGNC) and American Capital Mortgage (MTGE). AGNC's and MTGE's share prices tower by about 10% over their book values ($29.06 and $21.78 respectively, as of 3/31). Expect secondaries soon to "monetize the premium."  [View news story]
    Something I've always wondered: if mREITs typically fall 2 x distribution the day after going ex, is there a group of traders that follow these companies and short them in advance of the ex date? Or to simplify it, how about just selling all your stock before the ex date adn buying it back after? You'd have given up the distribution, but bought back in at a savings of 2x.
    Just when I think I understand this stuff...
    May 22 05:31 PM | 1 Like Like |Link to Comment
  • Chesapeake Energy: Buy Into The Weakness Post-Earnings [View article]
    Here's one from the heart of the oil patch, a petroleum engineer with 30+ years of experience in upstream finance and evaluations and a life-long personal investment manager: Aubrey is nothing more than a very aggressive landman. His best deals have always been based on getting to the play first, leasing the fastest for the lowest prices, then leveraging the land position through JVs and asset sales. That's fine, but it's always a quick shot and never sustained growth. If you want to know how badly that can turn out, go back 15 or so years and look at how CHK handled Masters Creek. Aubrey's real value is in finding the next big thing and driving his people to lease, lease, lease. Once he's exhausted his JV capabilities the company's left with "nothing" but the option to drill and produce, like a real company. Two big problems with that: 1) you can't horizontally drill, frac and produce gas properties at $2/MCF (or $3, or even $4). 2) CHK is not particularly good at drilling and producing. The only hope here is that gas prices will begin to recover and the unwashed masses will stream back into CHK because they're always attracted by bright lights and loud noises. But why take the chance that CHK is going to dissolve in Aubrey's mistakes when there are a dozen or more great nat gas companies that are well run and crisis free? Take a look at UPL and compare all meaningful metrics; there's no reason to own CHK.
    May 3 12:44 AM | 1 Like Like |Link to Comment
  • It's Not Easy Being GreenHunter [View article]
    Short but sweet, a fair analysis that hits all the high spots without slogging through the details. I've been in GRH from the beginning, thinking that the business plan was solid and knowing the need for SWD in Appalachia. What I hadn't counted on was what basically comes down to mismanagement of the company's finances. As noted, that issue now clouds out the operational advantages the company has.

    Yet I hold on. As larger players expand into SWD in the region, my hopes are that GRH will be an attractive acquisition candidate. I'm not sure what the premium might be in such a case, but it's not unusual to see 25-50% premiums above current stock prices being paid.

    Can this happen here? I've no idea, and would appreciate any feedback. Without this hope, there's little reason to hold the stock.
    Jan 24 12:18 PM | Likes Like |Link to Comment
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